IN THE NATIONAL COMPANY LAW TRIBUNAL

MUMBAI BENCH, COURT - II

IA No. 2201 OF 2023

IN
CP (I.B.) No. 4362/IBC/MB/2018

An Interlocutory Application under Section

30 (6) a/w Section 31 of the Insolvency and
Bankruptcy Code, 2016 r/w Regulation
39(4) of the Insolvency and Bankruptcy
Board of India (Insolvency Resolution
Process for Corporate Persons)
Regulations, 2016.

Mr. Kinjalkumar Madhubhai Chaudhary

Resolution Profession of

M/s. Shamik Enterprises Private Limited

Having its registered office at:- 9B, Vardan
Tower, Lakhudi Circle, Navrangpura,
Ahmedabad – 380014

….. Applicant/Resolution Professional

In the matter of

Hindustan Candle Manufacturing Co. Pvt.

Ltd.
..… Petitioner/Financial Creditor
Versus
Shamik Enterprises Private Limited
…..Respondent/Corporate Debtor
Order Delivered on :- 23.09.2024
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Coram:
[

Mr. Anil Raj Chellan Mr. Kuldip Kumar Kareer

Member (Technical) Member (Judicial)

Appearances:

For the Applicant/RP : Adv. Nausher Kohli a/w Adv. Amey

Hadwale a/w Adv. Geeta Lundwani

ORDER

Per: -Mr. Anil Raj Chellan, Member (Technical)

1. This Interlocutory Application is filed by Mr Kinjalkumar Madhubhai

Chaudhary, the Applicant-Resolution Professional of Shamik

Enterprises Private Limited ( the ‘Corporate Debtor’) seeking approval

of the Resolution Plan under Section 30(6) read with Section 31 of the

Insolvency and Bankruptcy Code, 2016 (the ‘Code’) read with

Regulation 39(4) of the Insolvency and Bankruptcy Board of India

(Insolvency Process of Corporate Persons) Regulation 2016 (‘CIRP

Regulations’) submitted by Vivaa Tradecom Private Limited

(‘Successful Resolution Applicant’ ) and duly approved by 77.21% votes

of the Committee of Creditors (‘CoC’) of the Corporate Debtor in its

meeting held on 31.01.2023.

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2. The Applicant states that this Tribunal vide its order dated 03.02.2022

admitted the application for initiation of Corporate Insolvency

Resolution Process (‘CIRP’) filed by Hindustan Candle Manufacturing

Company Private Limited in respect of the Corporate Debtor in

accordance with Section 7 of the Code. Pursuant to the admission order,

the Applicant herein was appointed as the Interim Resolution Profession

(‘IRP’) for conducting and supervising the CIRP.

3. The Applicant issued a public announcement in two newspapers (in

English and Marathi) on 06.02.2022 for inviting claims from the

creditors as contemplated under Section 15 of the Code. Based on the

claims received, the CoC was constituted on 24.02.2022 and the

Applicant filed the report certifying the Constitution of the CoC on

24.02.2022. In the first meeting of CoC held on 03.03.2022, a resolution

was passed to confirm the Applicant as Resolution Professional (RP) of

Corporate Debtor.

4. The Applicant further states that after the constitution of the CoC on

24.02.2022, based on the claims received, the CoC was reconstituted on

02.03.2022 and 21.03.2022. Thereafter, the Applicant received further

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claims from homebuyers as well as other unsecured creditors.

Accordingly, the CoC was again reconstituted on 11.07.2022 which

includes seven homebuyers.

5. The CoC at its 4th meeting held on 21.07.2022 resolved to publish Form

G-Invitation of Expression of Interest (‘EoI’). According to the aforesaid

resolution, the Applicant published Form G in the newspapers namely,

Free Press Journal -All Mumbai Edition dated 24.03.2022 (English) and

Navshakti- all Mumbai Edition (Marathi) on 27.07.2022 wherein, the

last date of submission of Expression of Interest (‘EoI’) was 18.09.2022.

Pursuant to the publication of Form G, the Applicant received only one

Expression of Interest (EoI) from the perspective Resolution Applicant

PRA) -Vivaa Tradecom Private Limited who meets the eligibility criteria

and has also paid an EMD deposit of Rs.5 lakh. At the request of the

PRA, the CoC extended time for submission of the Resolution Plan to

04.10.2022 and the PRA submitted the Resolution Plan on 04.10.2022.

In the 7thCoC meeting held on 21.10.2022, the feasibility and viability of

the Resolution Plan submitted by the PRA was discussed.

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6. The resolution plan was further discussed in the 8th CoC held on

09.12.2022 and the 9th CoC held on 30.12.2022 and the PRA was

requested to revise the Resolution Plan to increase the financial bid

amount. Accordingly, the PRA submitted the Revised Resolution Plan

dated 27.01.2023 which was considered by the CoC at its meeting 10th

meeting held on 30.01.2023 and on 31.01.2023, the Plan was put to vote

(voting period from 31.01.2023 at 7 PM till 07.02.2023 at 7 PM which

was further extended till 14.02.2023). The Members of the CoC

approved the Resolution Plan submitted by the PRA-Vivaa Tradecom

Private Limited under Section 30(4) of the Code with 77.21% votes.

7. The Applicant states that he had filed two applications- one for an

extension of 90 days beyond 180 days of CIRP (IA No. 2073 of 2022)

and another for an extension/exclusion of 60 days beyond 270 days (IA

No. 3375 of 2022) which were allowed by this Tribunal and extended

the CIRP period till 07.04.2023. After approval of the Resolution Plan

by the CoC, this application has been filed by the Applicant seeking

approval of the Resolution Plan submitted by the Successful Resolution

Applicant ( Vivaa Tradecom Private Limited).

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Brief Background of the Corporate Debtors:-

8. The Corporate Debtor was established in 1998 as a firm and

incorporated in 2001 as a private limited company. The main objects of

the Corporate Debtor are to carry on the business of builders, property

developers, building contractors, and real estate developers. The

Corporate Debtor is also in the business of developing properties

(houses, apartments, flats, shops, godowns, offices, etc.) Thus, the

Corporate Debtor is involved in the planning, designing, constructing

and handing over of completed real estate projects- both residential and

commercial and also redevelopment of projects where the lands are

owned by third parties or residential society. The Corporate Debtor has

business interests mainly in and around Mumbai City, Thane, and

Greater Mumbai City. There are many real estate projects undertaken

by the Corporate Debtor which are under construction.

Brief Background of the Resolution Applicant:

9. Vivaa Tradecom Private Limited was initially incorporated with the

name of Anantnath Infracon Private Limited with the object of doing

the business of development and construction. Later on, the name of the
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company was changed to Vivaa Tradecom Private Limited. The SRA

has more than 12 years of experience in spinning, weaving, and finishing

of the textile industry. The registered office of the SRA is situated in the

State of Gujarat.

10. The SRA has stated in the Resolution Plan that it specializes in custom

home building, remodels, and additions, and has a reputation for

quality, craftsmanship, and attention to detail. The residential apartment

construction activity refers to the process of building and constructing

apartment buildings for residential use. SRA states that Mr. Rajesh

Thakur, a B. Tech from IIT Kharagpur and a Civil Engineer, having an

experience of more than 15 years with a real estate company is

associated with SRA and hence, SRA does not see any challenge for the

completion of the pending projects and the SRA is stated to be

technically sound and capable enough to execute the projects in time.

11. Salient Features of the Approved Resolution Plan

Application of Funds Amount ₹

Liabilities to be resolved/settled

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a. Insolvency Resolution Process 44,73,830/-

Cost

b. Financial Creditors (Secured)

c. Financial Creditors (Unsecured) 2,00,00,000/-

d. Workmen/Employees 1,22,980/-

e. Statutory dues 9,876/-

f. Operational Creditors 3,93,314/-

g. Other Creditors (Related Parties) NIL

h. Equity Share Capital NIL

i. Contingent Liabilities* NIL

Total Fund based 2,50,00,000/-

Non-Fund Based:

Application of Amount ₹
Funds

Financial Creditor in class to 10,51,57,112/-*

whom allotment is to be made

Total Non-Fund based 10,51,57,112/-*

Note: The amount of Rs. 10,51,57,112/- provided in the Plan for
Financial Creditor in Class will be in the form of
possession of Flats not in the form of cash.

Application of Funds Amount ₹

Fund Based 2,50,00,000/-

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Non-Fund Based 10,51,57,112/-

Total Cost of Resolution Plan 13,01,57,112/-

Payment Under Plan:

a. Insolvency Resolution Process Cost (CIRP Cost):-

The CIRP Cost is estimated at Rs. 44,73,830/- (Rupees Forty-Four

Lakh Seventy-Three Thousand Eight Hundred Thirty Only). SRA

proposes to pay the entire CIRP Cost within 90 days from the Effective

Date (the date of handover subsequent to the approval of the

Resolution Plan by the Tribunal). In case the CIRP Cost exceeds the

estimated costs, the same shall be paid out of payments to Financial

Creditors. However, if the CIRP costs are less than the estimated costs,

the SRA shall pay only such lesser amount. The CIRP Costs shall be

funded out of existing business and net worth of the SRA.

b. Payments to Employees/Workmen
i. The claims made by the workmen and employees amount to Rs.

1,31,98,950/- (Rupees One Crore Thirty-One Lakh Ninety-Eight

Thousand Nine Hundred Fifty Only) and the admitted claim is Rs.

1,22,98,116/- (Rupees One Crore Twenty-Two Lakh Ninety-Eight

Thousand One Hundred Sixteen Only). The SRA proposes to pay one

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percent amount towards the employees and workmen i.e. Rs. 1,22,980/-

(Rupees One Lakh Twenty-Two Thousand Nine Hundred Eighty Only)

within 90 days from the Effective Date. The Resolution Plan states that

the remaining portion of the claim shall be written off in full and shall be

deemed to be permanently extinguished. All the cases/suits, if any, filed

by the employees/workmen against the Corporate Debtor on account of

their dues shall stand settled without any further action and such

employees shall not have any other remedy except for payments as

envisaged under the Resolution Plan.

ii. All the dues of workmen and employees including any dues towards

Provident Fund, Gratuity, Employees State Insurance Scheme,

Professional Tax or any other Taxes in nature of employment or all the

liabilities by whatever name called in relation to any period prior to the

Insolvency Commencement Date will be written off in full and shall be

deemed to be permanently extinguished.

iii. The existing employees of the Corporate Debtor will continue to be

employed by the Corporate Debtor subject to establishing the efficiency

test to the satisfaction of the SRA.

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c. Payments to Operational Creditors including Government dues but

excluding workmen and employees:-
The admitted claims of Operational Creditors are as under:-
Particulars Amount Claim Claim Admitted in
Government dues 39,50,252 39,50,252
Operational Creditors 22,74,10,344 15,73,25,535
Total 23,13,60,596 16,12,75,787

i. The SRA proposes to pay 0.25% of the admitted claim to Operational

Creditors which comes to Rs. 4,03,190/- (Rupees Four Lakh Three

Thousand One Hundred Ninety Only). The payment to the Operational

Creditors shall be made in proportion to the admitted claim values

within 90 days from the Effective Date.

ii. As per the due diligence conducted by the SRA, the outstanding liability

of the Corporate Debtor exceeds the value of tangible assets/inventory.

Therefore, the liquidation value payable to the Operational Creditors

including Government dues or other Creditors shall be nil. SRA, is,

therefore, justified in payment of 0.25% to the Operational Creditors,

including the Government. In case the amount proposed to the

Operational Creditors is found to be less than the liquidation value due

to them, as per Section 53(1) of the Code, SRA undertakes to pay such

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difference amount to the Operational Creditors within 90 days from the

Effective Date.

d. Payments to the Financial Creditors (Secured and Unsecured)

(i) As per the Information Memorandum, the total claims filed by the

Financial Creditors (other than Creditors in Class) amount to Rs.

90,48,37,197/- (Rupees Ninety Crore Forty-Eight Lakh Thirty-Seven

Thousand One Hundred Ninety-Seven Only) out of which the claims

aggregating to Rs. 88,43,73,190/- (Rupees Eighty-Eight Crore Forty-

Three Lakh Seventy-Three Thousand One Hundred Ninety Only) have

been admitted by the Applicant. The SRA proposes to pay a consolidated

sum of Rs. 2,00,00,000/- (Rupees Two Crore Only) towards a full and

final settlement of their claims. The payment shall be made by the SRA

within 120 days from the Effective Date. The amount shall be distributed

among the Financial Creditors in the ratio and manner to be decided by

the Financial Creditors, being CoC Members.

(ii) Disbursement of Payment to secured financial creditors shall be made by

the Monitoring Agency against NOC to be issued by secured financial

creditors.

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e. Payments to Financial Creditors (Creditors in Class -Home Buyers)

As per the Information Memorandum, there are six projects under

implementation and the treatment of home buyers for those projects is

as under:-

(i) Project Ashta Vinayak at Safale

a. The SRA proposes to demerge the said project into another company
namely, Shankheshwar Wind Power Developers Private Limited (the
Resulting Company), the demerger shall be through this Resolution
Plan.

b. The Resulting Company shall complete the project and deliver the
homes against their claims. Each home buyer shall pay Rs. 500/- (Only
Five Hundred Rupees) per square foot towards cost escalation charges
over and above the total amount due from the allottees. This amount is
to be paid within a period of 90 days from the approval of the
Resolution Plan.

c. Claims received from home buyers of any Tower other than Tower B
& C shall be considered as Unsecured Financial Creditors and shall be
included in the list of Unsecured Financial Creditors. Such Creditors
would be paid in the ratio to be decided by the CoC.

d. If any units are occupied by the allottees without receipt of an

occupancy certificate from the concerned authority, in such case, any

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penalty, fees, charges, interest, or any other demand shall be recovered

from the allottees of respective units in full.

e. The Resulting Company shall give possession of all the units within 36
months from the date of handover of the Project.

(ii) Project Om Prabhu Ashish, Vile Parle (E), Mumbai

(a) No claim has been received from any allottee of this project. However,
the SRA proposes to demerge the project under the Resolution Plan
to a new entity namely -Shishir Energy Private Limited (Resulting
Company). Demerger shall be through approval of the Resolution
Plan by the Tribunal.

(b) The Resulting Company shall construct the project and develop the
land as per the approved plan or modified plan.

(c) If any units are occupied by the allottees without receipt of an

occupancy certificate from the concerned authority, in such case, any
penalty, fees, charges, interest, or any other demand shall be recovered
from the allottees of respective units in full.

(d) The Resulting Company shall give possession of all the units within 36
months from the date of handover of the Project to the Resulting
Company.

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(iii) Project Virmati Villa, Borivali

a. RP has received claims from seven allottees against the purchase of

units under this project to the extent of Rs. 11,26,57,217/- (Rupees
Eleven Crore Twenty-Six Lakh Fifty-Seven Thousand Two Hundred
Seventeen Only) wherein, the admitted claim is Rs. 9,86,73,039/-
(Rupees Nine Crore Eighty-Six Lakh Seventy-Three Thousand
Thirty-nine Only).

b. It is stated that the project is almost complete but the occupation

certificate is yet to be received. In case the OC is to be obtained by the
Corporate Debtor, the expenses of getting such OC shall be recovered
from the allottees/society in proportion to the square feet of each unit
in advance.

c. If any amount is pending to be received from any home buyer with

respect to the Corporate Debtor, the same shall be payable by such
home buyer to the Corporate Debtor within a period of 30 days from
the Effective Date.

(iv) Project Chachanagar Chs Ltd. Andheri (W)

a. The RP has received five claims from allottees of this project

aggregating to Rs. 2,54,42,213/- (Rupees Two Crore Fifty-Four Lakh
Forty-Two Thousand Two Hundred Thirteen Only) wherein an
amount of Rs. 2,01,37,862/- (Rupees Two Crore One Lakh Thirty-
Seven Thousand Eight Hundred Sixty-Two Only) has been admitted.

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b. As the project was not started, the RP has categorized these claims as
Unsecured Financial Creditors. SRA shall pay an amount to such
creditors as part of Unsecured Financial Creditors. SRA may not
execute the project and shall not be liable for any act done by the
suspended management of the Corporate Debtor towards this project.

(v) Project The Deepa CHSL

a. RP has received a claim from one allottee for Rs. 1,85,76,674/-

(Rupees One Crore Eighty-Five Lakh Seventy-Six Thousand Six
Hundred Seventy-Four Only) out of which Rs. 1,12,72,549/- (Rupees
One Crore Twelve Lakh Seventy-Two Thousand Five Hundred
Forty-Nine Only) has been admitted.

b. As the project was not started, the RP has categorized this claim as
Unsecured Financial Creditor. SRA shall pay the amount to such
creditor as part of the Unsecured Financial Creditor. SRA may not
execute the project and shall not be liable for any act done by the
suspended management of the Corporate Debtor towards this project.

(vi) Project Kusum Bharti CHSL

a. RP has received claims from two allottees for Rs. 1,02,90,000/-

(Rupees One Crore Two Lakh Ninety Thousand Only) out of which
Rs. 1,02,90,000/- (Rupees One Crore Two Lakh Ninety Thousand
Only) has been admitted.

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b. As the project was not started, the RP has categorized these claims as
Unsecured Financial Creditors. SRA shall pay the amount to such
creditors as part of the Unsecured Financial Creditors. SRA may not
execute the project and shall not be liable for any act done by the
suspended management of the Corporate Debtor towards this project.

(vii) Other Projects

There may be other projects/redevelopment projects which have

been undertaken by the Corporate Debtor, but no work might have
been started. SRA shall not be liable for any kind of liability towards
such projects.

(viii) Cost Escalation Clause

SRA reserves the right to demand extra charges on account of the

escalation of construction related material and labour cost. Further,
the SRA will not raise any demand if the price escalation is up to
10% of the projected cost. However, if the increase in cost is more
than 10% the same shall be levied onto the allottees.

viii) Summary of Payment Terms under the Proposed Plan

S. Category of Creditor Amount of Claim Amount
N Claim (Rs.) Admitted provided in
(Rs.) the Plan
1 Insolvency Resolution Process NA NA 44,73,830
Cost
Operational Creditor and
Government Dues
A. Operational Creditors 22,74,10,344 15,73,25,535 4,03,190
B. Government Dues 39,50,252 39,50,252
C. Dues against Purchase of Land Not Received NIL NIL

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2 D. Dues against Collaboration Not Received NIL NIL

Agreements
E. Dues against Joint Not Received NIL NIL
Development Agreements
F. Dues against any Not Received NIL NIL
Decree/Arbitration Awards
Sub Total 23,13,60,596 13,61,67,973 4,03,190
3 Workmen and Employees 1,31,98,950 1,22,98,116 1,22,980
4. Financial Creditors
A. Secured Financial Creditors 8,89,49,651 8,89,49,651
(Other than Creditors in Class)
B. Unsecured Financial Creditor 81,58,87,546 79,54,23,539 2,00,00,000
(Other than Creditors in class)
D. Financial Creditor in Class to 14,76,03,613 13,04,68,787 10,51,57,112
whom allotment is to be made (Principal
Amount)#
6 Share Holders NIL NIL NIL
Grand Total 129,70,00,356 118,84,15,880 13,01,57,112
8 Working Capital requirement for 1,00,00,000
various projects
Total 129,70,00,356 118,84,15,880 14,01,57,112
#Note: The amount of Rs. 10,51,57,112 provided in the Plan for
Financial Creditor in Class will be in the form of possession of Flats,
not in the form of Cash.

Sources of Funds for implementation of the resolution plan:

Sources of Funds of Resolution Applicants Amount Rs. In Cr.

From Liquidity of the Resolution Applicant and 3.50 Cr.
Corporate Debtor
Total 3.50 Cr.

Schedule of amount of working introduction:

Discerption Amount in Cr.
As and when requirement arises 1.00 Cr.
Total Amount 1.00 Cr.*
*In case a requirement arises over and above Rs. 1.00 Cr. it shall be
met out from own sources of Resolution Applicant.

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12. Management of the Corporate Debtor

(a) Upon the approval of the Resolution Plan by the Adjudicating

Authority, the management and the operations of the Corporate

Debtor will be taken over by the newly constituted Board of Directors,

as nominated by the Successful Resolution Applicant.

(b) Post handover of the operations of the Corporate Debtor to the newly

constituted Board, the Monitoring Agency shall supervise the

implementation of the resolution plan. The Monitoring Agency shall

comprise the RP as Chairman, One representative from the Financial

Creditor, One representative on behalf of the Corporate Debtor to be

nominated by SRA, and One Technical Expert appointed by the RP.

13. Eligibility of SRA under Section 29A of the Code

The Successful Resolution Applicant has provided to the Resolution

Professional an affidavit dated 04.10.2022 confirming eligibility u/s.

29A of the Code.

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14. Performance Guarantee

The SRA has received Rs.5 lakh along with EoI on 10.08.2022 and

EMD of Rs.12.50 lakh on 10.10.2022 along with Resolution Plam. The

said amount of Rs.17.50 lakh is deposited into the bank account of the

Corporate Debtor. Further, the SRA has furnished performance

security amounting to Rs. 12.50 lakh through the bank account of the

Corporate Debtor which is reflected in the bank statement of the

Corporate Debtor.

15. Recoveries from Preferential/Fraudulent/Undervalued

Transactions.

Any amount recovered out of preferential/ fraudulent/ avoidance

transactions u/s. 43, 45, 50, and 66 of the Code, if any, filed by the

IRP/RP shall be pursued by the SRA at the cost of the Corporate

Debtor and all the benefits of such applications shall be available to the

financial creditors. The recovery, if any, shall be distributed to the

unsecured financial creditors in the ratio of their admitted claims.

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16. Reliefs and Concessions

The Successful Resolution Applicant has sought various reliefs and

concessions based on the clean slate concept laid down by the Hon’ble

Supreme Court in various judgements, which are necessary to keep the

Corporate Debtor as going concern, release from any and all

liabilities/proceedings, disputes and noncompliance prior to the NCLT

Approval Date and extended period for renewal or revival of licenses

for running the business of the Corporate Debtor.

17. Appointment of Authorized Representative

The Applicant submits that the Applicant had filed an application

bearing IA No. 2275 of 2022 seeking the appointment of an Authorized

Representative for the class of creditors i.e., home buyers which is still

pending. However, all such creditors have been invited to participate

in the meeting of the CoC and vote on the resolutions.

18. The Applicant further submits that the Resolution Plan submitted is in

compliance with Section 30 (2) of the Code and Regulation 38 (A) of

the CIRP Regulations. The RP has also provided a compliance

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certificate in “FORM H” as mandated under the Code for seeking

approval of the Resolution Plan from this Tribunal.

Observations of the Adjudicating Authority:-

19. We have heard the Counsel for the Applicant and perused the

Resolution Plan and related documents submitted along with the

Application.

20. As referred to in the above summary of the Resolution Plan, we are

satisfied that all the requirements of Section 30(2) are fulfilled and no

provision of law for the time being in force appears to have been

contravened. The Plan value is above the liquidation value assessed by

the valuers.

21. Section 30(4) of the Code reads as follows:

“(4) The committee of creditors may approve a resolution plan by a vote

of not less than sixty-six percent of voting share of the financial creditors,
after considering its feasibility and viability, the manner of distribution
proposed, which may take into account the order of priority amongst
creditors as laid down in subsection (1) of Section 53, including the
priority and value of the security interest of a secured creditor and such
other requirement or may be specified by the Board.’

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22. Section 30(6) of the Code enjoins the Resolution Professional to submit

the Resolution Plan, as approved by the CoC to the Adjudicating

Authority. Section 31 of the Code deals with the approval of the

Resolution Plan by the Authority if it is satisfied that the Resolution

Plan as approved by the CoC under section 30(4) meets the

requirements provided under section 30(2) of the Code. Thus, it is the

duty of the Adjudicating Authority to satisfy itself that the Resolution

Plan, as approved by the CoC, meets the above requirements.

23. On perusal of the Resolution Plan, it is observed that the Resolution

Plan provides for the following:

a. Payment of CIRP cost as specified under Section 30(2)(a) of the

Code;
b. Payment of debts of the Operational Creditors as specified under
Section 30(2) (b) of the Code;
c. For the management of the affairs of the Corporate Debtor after
approval of the Resolution Plan; and
d. The implementation and supervision of the Resolution Plan by
the RP and the CoC as specified under Section 30(2) (d) of the
Code.

24. In K Sashidhar vs. Indian Overseas Bank and Ors. (Civil Appeal No.

10673/2018 decided on 05.02.2019) (2019) the Hon’ble Apex Court held

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that if the CoC had approved the Resolution Plan by the requisite

percent of voting share, then as per section 30(6) of the Code, it is

imperative for the Resolution Professional to submit the same to the

Adjudicating Authority. On receipt of such a proposal, the Adjudicating

Authority is required to satisfy itself that the Resolution Plan, as

approved by the CoC, meets the requirements specified in Section 30(2).

The Hon’ble Apex Court further observed that the role of the NCLT is

‘no more and no less’. The Hon’ble Apex Court further held that the

discretion of the Adjudicating Authority is circumscribed by Section 31

and is limited to the scrutiny of the Resolution Plan ‘as approved’ by the

requisite percentage of voting share of financial creditors. Even in that

enquiry, the grounds on which the Adjudicating Authority can reject the

Resolution Plan is with reference to matters specified in Section 30(2)

when the Resolution Plan does not conform to the stated requirements.

The legislature, consciously, has not provided any ground to challenge

the commercial wisdom of the individual financial creditors or their

collective decision before the Adjudicating Authority.

25. In CoC of Essar Steel India Limited vs. Satish Kumar Gupta and Ors (2020)

8 SCC 531 the Hon’ble Apex Court clearly held that the Adjudicating

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Authority would not have the power to modify the Resolution Plan

which the CoC in their commercial wisdom has approved. In para 42,

the Hon’ble Court observed as under:

‘Thus, it is clear that the limited judicial review available which can in no
circumstances trespass upon a business decision of the majority of the
Committee of Creditors, has to be within the four corners of section 30(2) of
the Code, in so far as the Adjudicating Authority is concerned and section 32
read with section 61(3) of the Code, insofar as the Appellate Tribunal is
concerned, the parameters of such review having been clearly laid down in K.
Sashidhar (supra).’

26. The Hon’ble Supreme Court in the matter of Ghanshyam Mishra and

Sons Private Limited Vs. Edelweiss Asset Reconstruction Company

Limited, (Civil Appeal No. 8129 of 2019 decided on 13.04.2021) held that

on the date of the approval of the Resolution Plan by the Adjudicating

Authority, all such claims which are not a part of the Resolution Plan,

shall stand extinguished and no person will be entitled to initiate or

continue any proceedings in respect to a claim which is not a part of

the Resolution Plan.

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27. In view of the discussions and the law thus settled, we are of the

considered view that the instant Resolution Plan meets the

requirements of Section 30(2) of the Code and the Regulations 37, 38,

38(1A), and 39(4) of the CIRP Regulations. The Resolution Plan is not

in contravention of any of the provisions of Section 29A of the Code

and is in accordance with law. We, therefore, allow the Application in

the following terms:

ORDER

28. The Application IA. No. 2201 of 2023 in C.P.(IB) 4362 of 2018 is

allowed and the Resolution Plan submitted by ‘Vivaa Tradecom

Private Limited’ is hereby approved. It shall become effective from this

date and shall form part of this order. It shall be binding on the

Corporate Debtor, its employees, members, and creditors including the

Central Government, any State Government, or any local authority to

whom a debt in respect of the payment of dues arising under any law

for the time being in force is due, guarantors and other stakeholders

involved in the Resolution Plan.

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29. Accordingly, no person or authority will be entitled to initiate or

continue any proceedings with respect to a claim prior to the approval

of the Resolution Plan which is not a part of the Resolution Plan.

30. The approval of the Resolution Plan shall not be construed as a waiver

of any future statutory obligations/liabilities of the Corporate Debtor

and shall be dealt with by the appropriate authorities in accordance

with law. Any waiver sought in the Resolution Plan relating to the

period after the date of this order, more particularly licenses and

approvals for keeping the Corporate Debtor as a going concern, shall

be subject to approval by the Authorities concerned and this Tribunal

will not deter such Authorities from dealing with any of the issues

arising after effecting the Resolution Plan. This Tribunal, however,

recommends due consideration of the revival of the Corporate Debtor.

The Corporate Debtor may obtain necessary approval required under

any law for the time being in force from the Appropriate Authority

within a period of one year from the date of approval of the Resolution

Plan.

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31. If any application(s) relating to preferential/fraudulent transactions

under Sections 43 and 66 of the Code is pending before the Tribunal,

the same shall be pursued by the Corporate Debtor at its costs and

expenses. However, the recovery, if any, shall be distributed to the

unsecured financial creditors in the ratio of their admitted claims.

32. In accordance with Section 32A of the Code, the liability of the

Corporate Debtor for an offence committed prior to the

commencement of the Corporate Insolvency Resolution Process shall

cease, and the Corporate Debtor shall not be prosecuted for such an

offence committed prior to the commencement of Corporate

Insolvency Resolution Process from the date of this order.

33. As per the Resolution Plan, the Corporate Debtor is to complete the

pending works of the Projects and hand over the possession to

apartment allottees within 36 months from the date of this order with a

grace period of six months till the Closing Date.

34. The capital structure and contribution of the Corporate Debtor shall be

transferred and restructured to the Resolution Applicant without any

further procedure required.

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35. The Monitoring Committee as proposed in the Resolution Plan shall

be constituted to supervise and implement the Resolution Plan. The

Resolution Professional, who is part of the Monitoring Committee,

shall submit quarterly progress reports to this Tribunal as regards the

implementation of the Resolution Plan and construction of the Projects

& delivery to the home buyers.

36. Other reliefs and concessions not covered in the aforesaid paragraphs

including exemption from levy of stamp duty, fees and registration

charges that may be applicable in relation to this Resolution Plan and

its implementation are not granted.

37. The moratorium declared under Section 14 of the Code shall cease to

have effect from this date.

38. The Applicant shall forward all records relating to the conduct of the

CIRP and the Resolution Plan to the IBBI along with a copy of this

order for information.

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39. The Applicant shall forthwith send a certified copy of this order to the

CoC and the Resolution Applicant respectively for necessary

compliance.

Sd/- Sd/-
ANIL RAJ CHELLAN KULDIP KUMAR KAREER
(MEMBER TECHNICAL) (MEMBER JUDICIAL)
Salam

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